Stocks weakened in the final hour of trading and closed the session mixed Tuesday as the prospect for interest rate cuts dimmed. The Dow Jones Industrial Average ended up as the only major index in positive ground, lifted by UnitedHealth Group, while the S&P 500 and Nasdaq indexes posted modest losses on the stock market today.
Earlier in the day, Federal Reserve Chair Jerome Powell indicated a change of heart in timing on rate cuts. The rate of price hikes remained higher than anticipated in the first quarter and did not reach the central bank's goal. This stickier-than-expected inflation had Powell questioning whether the Federal Reserve would cut interest rates this year.
"The more recent data show solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal," he said at a policy forum on U.S.-Canada economic relations. He added: "The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence."
Powell went on to say: "Right now, given the strength of the labor market and progress on inflation so far, it's appropriate to allow restrictive policy further time to work."
CME FedWatch recently showed a 43% chance of a rate cut at the Fed's July gathering. The odds for a cut stand at 68% at the Fed's September meeting. It had been speculated that the Fed might consider a rate cut at its June forum, but now the odds of that stand at 19%, CME FedWatch says.
Stock Market Today: Dow Picks Up Steam, S&P 500 Inches Higher
The Dow Jones Industrial Average closed higher nearly 0.2% but remained solidly below its 50-day moving average. The S&P 500 lost 0.2% and remained below its 50-day line after undercutting it Monday.
The Nasdaq reversed in the final hour to close 0.1% lower, holding below its 50-day line after breaching the mark on Monday. Monday was the first time the S&P 500 and Nasdaq sank below their 50-day lines since November.
The small-cap Russell 2000 lagged the other indexes and slid 0.4%. Volume rose on both the New York Stock Exchange and the Nasdaq compared with Monday's action, in preliminary numbers.
Among exchange traded funds, the Invesco QQQ Trust closed flat. The Innovator IBD 50 ETF edged higher by 0.2% on the stock market today.
West Texas intermediate crude oil dipped to $85.27 a barrel. The benchmark 10-year yield inched higher to 4.66%.
Warren Buffett And Trump Stocks Have This In Common
Trump Media & Technology stumbled another 14.1% in the wake of Monday's 18.3% drop. The company announced on Tuesday it plans to begin building its own content delivery network, called "CDN."
Monday's plunge came after news that the social-media company filed for a "preliminary prospectus" with the U.S. Securities and Exchange Commission to offer 21.49 million shares of common stock. The media stock retreated below its 200-day moving average on the stock market today. Shares have dropped sharply since late March.
Warren Buffett investment firm Berkshire Hathaway fell 0.8% and, falling for its seventh-straight session. The conglomerate slid below its 50-day line Friday and sank below the bottom of a flat base on Tuesday.
The company is expected to report first-quarter results on May 4, at the Berkshire annual meeting in Omaha, Neb.
IBD 50 stock Axon Enterprise trimmed larger losses and closed the day down 1%. The stock tested its 50-day line seeking support.
Shares broke out of a flat base and hit the 325.63 buy point on Thursday, but the breakout quickly failed. The Taser and police body camera maker flashed a sell signal after falling more than 7% below the buy point.
Stock Market Today: UnitedHealth Lifts Dow
UnitedHealth Group gapped up 5.2% in heavy volume after the managed care company beat first-quarter earnings and sales estimates, even with additional costs from a cyberattack. Shares hit a 52-week low on Friday and are down about 10% for the year. The stock's relative strength line reversed to the upside on Tuesday after a steep decline dating back to October.
UnitedHealth holds a dismal Relative Strength Rating of 20 and a suboptimal Composite Rating of 54 from Investor's Business Daily. But the stock was biggest gainer on the Dow Jones index Tuesday.
PNC Financial Services gapped down 2% after reporting first-quarter profit estimates that exceeded expectations but sales that missed forecasts. The regional bank fell further below its 50-day line. Shares broke out of a flat base late March but the breakout failed in early April as bank stocks felt pressure.
Morgan Stanley climbed nearly 2.5% after the financial giant exceeded first-quarter profit and revenue estimates. The big bank is trying to regain its 21-day exponential moving average and found support at its 50-day line. Morgan Stanley tumbled 5.3% on Thursday in heavy volume and fell through its 50-day line on reports that regulators are investigating its wealth management business.
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Stock Market Today: Live Nation Faces Looming Lawsuit
Dow Jones component Johnson & Johnson sank 2.1% after the health care products company beat first-quarter profit views and slightly missed sales expectations. The stock hit a 52-week low on Tuesday and is trading far below its 50-day line. The blue chip was the biggest loser among Dow Jones components on the stock market today.
Outside the Dow, Bank of America shed 3.5% in heavy trading after the big bank topped first-quarter adjusted earnings and sales. Shares of the bank fell below their 50-day line in stock market trading, in a possible sell signal. The stock is coming off a 52-week high reached on April 1.
Ticketmaster-parent Live Nation Entertainment gapped down 7.6% on news that the Justice Department will file an antitrust lawsuit against the live event promoter. The stock plunged below its 50-day line in heavy volume, triggering a sell signal.
Live Nation stock found support at its 200-day line, however.
Magnificent Seven Stocks: Nvidia Shows Up Tesla
Tesla saw more red and gapped down 2.7%, adding to Monday's 5.6% drop. Tesla announced Monday that it's cutting its workforce by more than 10%.
Finally, Leaderboard stock Nvidia notched up 1.6% and tested its 21-day line on the stock market today. The stock has wavered around that line for a couple of weeks as it forms a flat base.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
